Deck 6: Opportunities for Social Entrepreneurship

Question 1

Since an initial agreement between two compatible entrepreneurs is not likely to reflect each of their actual contributions over time, it is best to start out with equal shares.

Answer 1

False

Question 2

With teams that have worked together before on a successful venture and are each putting equal amounts of personal capital into a new business, it is okay to acknowledge that equality with equal stock ownership and equal salaries.

Answer 2

False

Question 3

A venture team should not be moved forward until critical issues have been worked out such as titles, corporate name, and what kind of lawyer will be needed.

Answer 3

False

Question 4

The existence of a quality venture team is one of the major differences between a firm that simply provides its founder with a job substitute and a higher potential venture.

Question 5

Founding entrepreneurs should not get distracted from the opportunity by focusing on their personal attitudes about what a team is, what its mission should be, and how it will be rewarded.

Question 6

Bonuses and fringe benefits should be instituted in fast-growth situations once the venture has passed breakeven.

Question 7

Research has proved inconclusive with regard to a significant connection between the growth potential of a new venture and the quality of its venture team.

Question 8

Usually, tax and legal expertise can best be obtained initially on a part-time basis.

Question 9

Which of the following is the most important consideration for venture capitalists when they are evaluating an opportunity?

A) Market potential
B) Intellectual property
C) The venture team
D) The competition
E) Potential payoff

Question 10

Instilling a vision, and the passion to win, occurs most often during the early growth phase of a venture.

Question 11

Whether or not a prospective team member's spouse is solidly in favour of his or her decision to pursue an opportunity is a valid evaluation criterion.

Question 12

Stock-vesting agreements are related to the long-term nature of the commitment of building a venture.

Question 13

Outside investors reviewing a high-potential venture are not going to be concerned with the internal reward system as long as the equity structure allows for subsequent rounds.

Question 14

Bringing in a right partner can mitigate the loneliness, stress, and other pressures that a lead entrepreneur is likely to face.

Question 15

It is best to divide stock equally among the founding partners.

Question 16

Stock distributions should favour the originator of the idea and individuals who spend a great amount of time and money preparing a compelling business plan.

Question 17

Rewards such as salary, stock options, and fringe benefits can be manipulated to reflect changes in performance.

Question 18

The reward system can be more loosely defined if the venture team is not planning to raise a significant amount of outside capital.

Question 19

The common approach to forming a new venture team also can be a common pitfall for new venture teams.

Question 20

Loose, flat organizational structures inhibit rapid learning.

Question 21

The kind of team needed depends upon ________ and ________.

A) the nature of the opportunity; what the lead entrepreneur brings to the venture
B) the nature of the opportunity; the resources needed, particularly financing
C) financing available; prevailing market conditions
D) financing available; what the lead entrepreneur brings to the venture
E) prevailing market conditions; the resources needed, particularly financing

Question 22

The reward system is best based on:

A) Time and effort
B) Performance
C) Title
D) Invested capital
E) Fairness

Question 23

Overall team performance is most often influenced by their:

A) Conflict resolution skills
B) Relative values
C) Cash flow
D) Equity distribution
E) I.T. infrastructure

Question 24

Discuss how forming and building a team is analogous to courtship and marriage.

Question 25

A start-up team has been unable to find the right marketing person to lead the effort in a particular niche. The window of opportunity requires that they act now. What is their best course of action?

A) Proceed without the key hire.
B) Keep searching until they find the right marketing professional.
C) Abandon the opportunity.
D) Broaden the search to include top marketing people with expertise in other potential niche markets.
E) Hire an executive search firm to recruit someone.

Question 26

A founder paid nothing for 100,000 shares that were vested for four years. In year three he decides to leave the company, which recently posted annual earnings of $250,000 on sales of $5 million. What should the company pay him for the block of 100,000 shares that will revert to the company?

Question 27

This combination can be very powerful:

A) The right team and the right venture opportunity
B) The right team and the necessary resources, including capital
C) The right venture opportunity and financing
D) The right idea in the right place at the right time
E) None have all the necessary elements

Question 28

Which of the following is the most critical skill of lead entrepreneurs?

A) Team building
B) Education
C) Technical experience
D) Perseverance
E) All of the answers are equally important

Question 29

Often, a team lacks skills and experience in dealing with such difficult start-up issues, including what activity with prospective partners?

Question 30

What are some common pitfalls in team building?

Question 31

The need for team members is something an entrepreneur thinks about ________, especially in the idea stage before start-up.

A) briefly
B) continuously
C) periodically (weekly or monthly)
D) annually
E) initially

Question 32

Discuss the concept of equal inequality with regard to new venture teams.

Question 33

Ventures that do not have teams are

A) A compelling opportunity
B) Experienced funding sources
C) Need to stick to their business plan
D) Abundant financial resources
E) Not necessarily predestined for the new venture graveyard

Question 34

Often, being the originator of the idea or expending a great amount of time or money in preparing the business plan leads to an assessment that his or her contribution is what?